According to recent reports, architects of the retail segment of the Indian central bank digital currency (CBDC) are aiming to extend the user base of the digital Rupee. The authorities are planning to extend the CBDC to one million users.
Sources familiar with the matter briefed the media that Indian authorities are planning to upscale their CBDC development as compared to their older targets and are going to prioritize solving the challenges of creating an offline version.
Interestingly, RBI officials publicly stated in March they were aiming for 500,000 users by July, and now are privately looking to hit double that amount. An anonymous source said:
Given India’s population as the world’s largest, we expect to reach the milestone of one million users easily and the tentative timeline for reaching one million users in three months.
The Reserve Bank of India (RBI) is running both retail and wholesale CBDC pilots at the moment. Reportedly, the retail CBDC pilot is active in at least 15 cities with more than 13 banks participating. India’s retail CBDC pilot began on December 1, last year, and has seen more than 100,000 customers participate in the four months since.
Addressing a press conference on Thursday, Shaktikanta Das, the governor of the Indian central bank, said that India’s digital rupee was the subject of great interest at a recent meeting of the financial leaders of the Group of 20 (G-20) which was hosted by India in Bengaluru. He added:
In fact, an eminent person from the international financial sector went to the extent of complementing the design of our CBDC, adding that the only thing he missed in the CBDC was the smell of new currency.
Notably, the Indian central bank initiated Hackathon to find solutions to the challenges that emerged around a retail CBDC including scalability, increasing transactions per second, and solutions for enabling offline transactions. Another anonymous source said:
This is nearly an impossible trinity. As of date, you can achieve two objectives but not the third. Hopefully, some technological innovation will address this soon.
Given the population of India, the RBI is hoping to conduct offline transactions by testing the use of wearables, cards like debit and credit, Bluetooth technology, and a smartphone. Additionally, the RBI is looking to address the risk of double spending.
Sources reveal that more than 50 proposals have been submitted to the central bank under the Hackathon to solve the problem of offline transactions. Additionally, the RBI has been interacting with private firms to consider solutions to improving scalability, even though no partnership has been initiated with any prominent blockchain-related entities.
While the central bank has recently not announced a timeline for rolling out a full-scale retail CBDC but had previously indicated it was aiming for the end of the year. In February, one of the largest retail Indian chains, Reliance Retail, announced that they have started accepting the digital rupee at one of its store lines and plans to extend the rollout to all its businesses.
CBDCs have become a relatively familiar and increasingly essential concept for countries across the globe. Amongst the nations advancing their CBDC plans, China has been leading the race. Chinese payment applications have also integrated the CBDC adoption into their platforms to foster the CBDC adoption. Additionally, Chinese authorities announced huge giveaways.
In the case of the United States, lawmakers have expressed their concerns regarding privacy in the digital Dollar. The fame of CBDCs also received noteworthy attention from international entities like the Bank of International Settlements (BIS) and SWIFT. Both agencies are developing platforms to facilitate users’ experience with CBDCs.